Volkswagen will pay about 3.3 billion euros, or $4.7 billion, for a 42 percent stake in Porsche ’s automotive unit as part of a plan for the gradual merger of the two manufacturers.
Volkswagen, the largest European automaker, will fully integrate the maker of the 911 sports car into its operations in 2011, as long as all merger requirements are met, the two companies said in separate statements Thursday , New York Times reports.
Shares in Porsche jumped 10.7% in early trading Friday, while Volkswagen dropped 3.5%.
Porsche is negotiating to sell its remaining options on Volkswagen to investors in Qatar.
Volkswagen said Friday that the planned deal is conditional on the successful sale of those options, which would make Qatar the group's third biggest shareholder.
"Additional new growth opportunities will emerge for Porsche under the umbrella of the integrated group," said Volkswagen CEO Martin Winterkorn in a statement.
"Following constructive talks, we have agreed a solution that reflects the interests of all parties. I am convinced that the outcome of this integration will be the best vehicles for our customers, secure jobs and the creation of long-term value for our shareholder," he added , MarketWatch reports.
The agreement should have a positive effect on Porsche shares because it values Porsche AG at more than the up to 11 billion euros previously expected, a local trader says.
He adds that Volkswagen ordinary shares should not be impacted at all, while Volkswagen preferred shares might be burdened by the indicated capital increase, although chances of an entry into the German top-30 index .GDAXI should increase after the closing of the transaction , Reuters India reports.
The discovery of the submarine has unveiled a few "inconsistencies." For example, how can one explain the fact that the sub was found where it needed to be searched for from the start?
When on a state visit to Singapore, Russian President Vladimir Putin promised to revisit the discussion of the 1956 Declaration between the USSR and Japan regarding the issue of the peace treaty with Japan
The TurkStream, which runs along the bottom of the Black Sea from Russia's Anapa to Turkey, will consist of two lines, each with a capacity of 15.75 billion cubic meters of gas a year